cudeco matters, page-110

Cant believe I was moderated. I did have a few reds hoots, so apologise for some remarks Hoots, you say that people wont make investment decisions based on what is said on HC, but there are some people that might just do that. These would be first time readers. You have the right to express your opinions, I know that, but its the continuous bagging of CDU and nothing else. My question is why post multiple posts daily bagging CDU. Your posts have shown announcements from the past, but as you know things change for a multiple of reasons.

Look at Newcrest MInes a few years back it was saying it would make hundreds of millions of dollars per year based on a gold price of $440 and ounce just a couple of years back. Now it has written off $2.6Billion when the gold price is $1300 an ounce. Things change and company's adapt. Most of the major larger mines have a cost price of up to $1500 per ounce and are losing $200 an ounce hoping that it will come back to $1800. These company's did their DFS and BFS based on $400 an ounce and now it costs them $1500 an ounce, what was the point of spending $$m on their DFS? Hoots you have probably said a few things over the years that haven't become reality as well. The good thing that separates CDU from other company's and what i have glistened is that it does adapt and makes decisions for its shareholders at any cost.

In a recent announcement CDU said that it had refused to pay Concrete Companies ridiculous amounts of money for laying concrete. As a surveyor I have witnessed this myself with Coal companies having to pay $5,500 for a cubic metre of concrete laid. I shake my head when the big companies just say yes. It appears from the announcements that CDU has said no and is prepared to cop the flak by saying NO in the interests of the shareholders and copping the timetable stretchout. It is easy to say yes. You can buy concrete 40mpa for less than $200 a cubic metre from a supplier, so the mark up is $5,300 a metre and they can lay 100 cubic metres a day. What would you do Hoots in the same position?? Would you say yes to $5,500 a cubic metre considering you have at a guess 10,-15,000 cubic metres in a process plant or would you do what CDU has done and found someone for a fifth of the price? Yes,I know from my own business of surveying that tendering is a drawn out process and re-tendering takes time, but the difference is savings is for 10,000 cubic metres at $1,000 a cubic metre is $10m, for 10,000 cubic metres at $5,500 is $55m. Savings $45m for saying NO. I know for a fact that in Mt Isa you wont get concrete laid under $5,000 a metre for big jobs in the bush.

During the GFC CDU purchased all of its mining fleet, at a guess I would say it probably saves the company around $1m a week. 20 trucks a day @ $200 hr each, 6 big excavators at $500 plus an hour, dozers loaders, graders, water trucks etc. 20 Trucks alone x $200 hr are $4,000 an hour x 24 hours a day is $96,000 a day or nearly $700,000 a week. I have been to the site at the last AGM and I reckon there would be no change $$ out of $1.3m a week savings on hire v owning your own fleet.

In addition CDU does not have a fly in - out policy savings for 200 people around $200,000 a week. CDU does not have a camp facility on site and only provides accom for some out of town employees savings around $120 per day per person.(thats the current rate for camps.) Thats another $24,000 a day savings. These are all real numbers and real savings. I think to be fair you should also look at the savings that the company made, instead of continually bagging it.I am not sticking up for WM or CDU, but I think that the discussions and posts should be fair and equitable.

The facts are CDU have a high grade copper deposit with over 1.6m tonnes of copper. Value around $12 billion. Whether the time for the DFS is in the past or in the future is something that Boards of companies makes decisions on. With the upcoming new JORC, with the added drilling for the past 18 months to be added it would seem ridiculous to spend $10m on a DFS only to have to do it again after the next upgrade. Obviously the Board has taken advice on these matters. There is no argument from anyone that the company has 30mt @ 1.7% Cu equiv, plus the high grade native copper and oxide zones and that the testwork for the native copper zones was over 4% Copper.

I have picked the positives instead of the negatives and some of the positive announcements instead of re-regurgitating the negative ones. All in all I think that the Board of CDU have made some brilliant decisions and yes, probably a couple of bad ones, but they are delivering the process plant as promised, be it a bit late.

I must point out one thing that probably isnt widely known and CDU havent used as an excuse, but have just copped the flak instead is that one of the rolls crushers in the crushing circuit that is being installed by the company contracted to build the crushing circuit actually caught fire after the brakes on the truck delivering it caught fire and had to have another one manufactured. Apparently it happened only 40 or 50 klms from Cloncurry. I would say that this is probably why the commissioning of the crusher circuit is behind time, but CDU havnt used it as an excuse, they have sucked it up obviously as just "one of those things" At least they are not giving the excuses, but just getting on with the job.

Anyway thats my say for today.